Posted on May 16, 2016 by staff

Brexit investment warning for UK tech start-ups


Britain’s tech start-ups could lose out on substantial investment if the nation leaves the European Union, according to a venture capital firm.

The EU allocates cash to venture capital firms – via the European Investment Fund (EIF) – for investment into the most promising start-ups across the 28 member states.

Luis Hanemann, partner at Berlin-based, said if the population opts out of the EU on June 23 it will become difficult to back our youngest tech firms.

“We have some European money from the European Investment Fund,” Hanemann told Business Insider.

“This [referendum] could make it more complicated [for us] to invest outside of the European Union.

“We hope that it’s not going to happen and we believe that it’s in the best interests of the European Union and the countries in there [that the UK remains part of the EU].” has almost £700million under management, with a “substantial” proportion of that coming from the EIF.

Meanwhile The Guardian has reported how none of Britain’s 14 unicorns – private tech companies valued above $1bn (£710m) – supports a Brexit.

Five are openly against Britain leaving the Union while the others are either neutral or declined to comment.

TransferWise co-founder Taavet Hinrikus said: “We believe it would be crazy for the UK to leave the EU, both for businesses and consumers.”

Zoopla co-founder Alex Chesterman said: “We have benefited from access to both capital and talent as part of the EU and leaving would create both economic and political uncertainty, which could have a material impact on our currency, borrowing rates, house prices and wider consumer prices.”

Hundreds of tech start-ups and entrepreneurs recently signed an open letter opposing Britain’s potential exit from the EU.

However BusinessCloud held Brexit breakfast debates in Lytham and Birkenhead and found many of the North West’s leading businessmen believed the economy to be robust enough to cope with a decision to leave.